AT&T and T-Mobile merging

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Junior (College 3rd year) ・Business ・APA ・4 Sources

Howson (2006) asserts that mergers and acquisitions involve the purchasing, selling, separating, and combining of various businesses with entities that are comparable in order to increase their overall profit. The overarching goal of mergers and acquisitions is to create a situation that will help the parties involved become more competitive in the market and increase their income. Thus, mergers and acquisitions happen when one company takes on all of the obligations and assets of another, maintaining its own identity while the acquired firm no longer exists (Cooper & Finkelstein, 2006).
AT & T is a holding company dedicated to extending its market network and coverage coupled by the need to broaden its long term evolution technology network. AT & T Company is now the biggest wireless carrier in the United States following the merge. Notably, both AT & T and T-Mobiles companies operate in a wireless industry. This plays an integral role to help the firms work together on new strategies to develop new devices and customer friendly applications. T-Mobile benefited from the acquisition by reducing all their debts by acquiring AT & T stocked valued. Before the merge, T-Mobile holding was struggling since the firm’s stock value was flopping. In addition, they registered a drop in their total sale. The trend seemed persistent thereby triggering the need for the merge. T-Mobile has been offering basic services such as texting, voice mail, free minutes over the weekend and accessible plan to attract customers. However, the company dragged behind from its competitors as a result of failing to continuously upgrade its internet network. T-Mobile was performing well in business with its basic services but when the wireless data was introduced, the company started losing customers and a subsequent decline in the sale was observed. This is because customers wanted new devices and new technology, affordable data plans as well as wireless data.
After realizing the dynamics in the customer’s needs, the outfit devised a strategy to get back to business. However, it was not successful since it was too late. Its competitors including AT & T, Verizon and sprint were offering new technology, new devices and improved wireless internet data. The company introduced new technology, new services and wireless data thereby enabling the firm to attract their lost customers back. This was not an ultimate solution since it could not compensate for the already lost revenue. However, it went ahead and introduced the 4G internet in the United States as it could not compete with the 3G network but when the wireless industry adopted the 4G network it could not again manage to compete and retain its customers as many of its customers switched to rival competitors. Notably, to maintain stability in the market there was a need for a merge for the purposes of exploring new market and taking new risks.
The merger deal was a great opportunity for the two players. This is because AT & T holding became the largest wireless company in the United States with increased market coverage and network by merging with T-Mobile which was an important and great competitor. Since the two companies operated in the same line of business the dual shared massive similarities in products and operations hence by merging the two opened new cost saving opportunities including economies of scale in transport and marketing which are transferred to consumers by reduced product price. The company is now able to compete favorably by providing cheaper plan, phones and no contract plans thereby leading to increased business. It also assists the companies explore new markets, increase its adaptability and become more stable by spreading risks due to uncertainty in the environment (Harvey & Newgarden, 1969). It was therefore a wise decision for the two firms to merge. The corporations gained market leadership in the wireless industry by offering new technologies; new devices and improved wireless data at low prices resulting in increased competitive advantage in the market.

A Profitable Candidate for a Merger and Acquisition

Publix Super Market Inc has many subsidiaries across the United States; its primary business involves operating and providing retail food supermarkets. The Company sells grocery, including dairy, produce, deli, bakery, meat and seafood health and beauty care, general merchandise, pharmacy, floral and other products and services. The company has many sources of the merchandise it distributes including both branded and unbranded products like meat and seafood. The merchandise is distributed from the company’s distribution centre or directly from the suppliers.
Publix Super Market Inc top management is considering a possible merge with Bi-Lo Supermarket. The two companies operate and compete within the same industry and hence this particular move will be beneficial to both firms. After a comprehensive analysis of the benefits to be accrued, it was observed that customers will be happy with the merge as they would take advantage of possible discounts and coupons. In addition, customers would be more confident with the company’s ability to provide exceptional customer service. Moreover, the merge would strengthen the relationship with the customers because both companies can provide enhanced service and quality leading to improved customer satisfaction. Since the two companies operated in the same line of business there is high possibility of increased overall sales and revenue after merging into one firm. It will be a profitable target for both companies.
The two companies had been operating as competitors; therefore, after merging there are a number of opportunities that will be open for the two firms. First, there will be an increased market share for both firms. In addition the company will enjoys economies of scale because most of their activities and products are related thereby cutting down its overall cost (Gaughan, 2005). This can be transferred to customers by providing affordable prices for their products which will go along to attract additional clients leading to increased sales and revenues for the company.

Business level Strategy and Corporate Level strategy for International Companies

Business level strategy can be defined as an integrated, coordinated focus and actions employed by a firm with an aim of gaining a competitive advantage in the market by applying its key competencies (Harvey & Newgarden, 1969). Apple’s international business strategy entail making the best product and selling them across the world. It has operations in United States, Europe and Asia where they sell their products, outsource parts of their products in Korea and carry out manufacturing in china. The company’s principle focus is to keep on improving their products and sustain pace with new innovations by providing products that are exclusive and unique in different parts of the world.
Moreover, providing unique product in the target market is a successful strategy for Apple’s international Company. It has an outstanding competitive edge in market thereby enabling it to lead. The firm has always remained number one in the industry. The company is able to stay ahead of rivals in the market as it provides products with latest technology in the market. Customer needs keep changing from time to time; hence the company is able to adapt to those dynamics by providing products that meet their needs above reproach. The company target market include people who love having their products because they can experience a great adventure using the company’s latest technology.
On the hand, corporate level strategy can be defined as a set of actions carried out by a company with an aim of gaining competitive edge in the market by selecting various business processes related to different products (Cooper & Finkelstein, 2006). Apple’s corporate level strategy entail selling their product in first world countries like Europe and United States and manufacturing them in third world countries like china because of cheap labor which is more convenient for the company. The outfit makes their products based on customers’ demand. The firm’s key goal is to serve the technology market with latest technology and selling the latest devices to customers at high prices. The firm keeps its modern image with their new and latest products making customers keep an eye on the company because of its attraction. The firm offers both online and catalog sales across the globe since the corporation has chain retail stores which is an advantage against competitors.
Apple can improve its business level strategy by offering free applications for customers; the company offers an application MobileMe that shows different options in an Apple’s product to keep the calendar, email, contacts over air at a cost. The company should provide the said application free of charge to its customer because they buy their products at high prices as an appreciation to customers which may motivate them and increase their loyalty to Apple Company thereby raising customer retention.

Business Level and Corporate Level Strategy for a Local Companies

Southwest Airline Company is a low fare major domestic airline that has persistently continued to distinguish itself from other low fare carriers by providing a steady and reliable product with exceptional customer service. It was incorporated in Texas with three aircraft serving three different cities which include: Dallas, Hauston and San Antonio. The move has enabled Southwest Airline company emerge as the national largest carrier in terms of originating domestic passengers boarded serving seventy six destinations in thirty eight states and District of Columbia. International business level strategy as well as the resources and the capabilities established in the home country permitted and encouraged the firm to consider a strategy to explore markets in neighboring countries (Gaughan, 2005).
Southwest Airline Company international business level strategy can entail increasing their market coverage and networks by establishing and expanding their flight globally. Moreover, with the increasing number of companies operating internationally today, Southwest Airline Company can broaden their flight and serve customers in North and South America. The company can go internationally at low and affordable cost; this can encourage more passengers to use its aircrafts. The airline can also focus on events such as world cup which involves increased flights as many people attend such important international games to launch its operations globally. Notably, by charging low and affordable price it can earn a competitive advantage against other players in the same industry.
International corporate level strategy focuses on scope of the firms operations through both product and geographical diversification (Cooper & Finkelstein, 2006). Southwest should understand that going internationally is not enough. The airline has to face a constant cut throat competition from other big and known airlines firms like United Airlines and American Airlines. Therefore it is important to devise ways that can make the company remain competitive in the international market. In the stated case, Southwest Airline can reduce their cost in labor and high aircraft utilization to survive in the international airline operations market. The company can use different mechanisms to compete with large international airlines and can offer cheaper prices for their customer and ensure customer bags are checked free of charge, which may attract more customer to use its airline. In addition, in most cases the large airlines charge for any extra luggage with customers. Southwest Airline Company can offer their customers free luggage and no charge for extra bag thereby making customers happy and encouraged them to use the airline.
Moreover, customers would feel rewarded and appreciate. Such clients spread the good experience to other potential customers, resulting to increased number of customers and encouraged customer retention. This is therefore a good strategy for Southwest Airline Company. It would build a good reputation coupled with reduced fare charges for its customers thus yielding a competitive advantage against other competitors (Howson, 2006). The company can therefore increase revenues courtesy of augmented business level.

Reference

Cooper, C. L., & Finkelstein, S. (2006). Advances in mergers and acquisitions: Volume 5. Amsterdam: Elsevier JAI.
Gaughan, P. A. (2005). Mergers: What can go wrong and how to prevent it. Hoboken, NJ: J. Wiley.
Harvey, J. L., & Newgarden, A. (1969). Management guides to mergers & acquisitions. New York: Wiley-Interscience.
Howson, P. (2006). Commercial due diligence: The key to understanding value in an acquisition. Aldershot, Hants: Gower.

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